1. Antero Midstream to acquire HG Midstream for $1.1 billion. 2. Divesting Ohio Utica Shale assets for $400 million as part of strategy. 3. Acquisition expected to increase Free Cash Flow by over 15%. 4. Transaction multiples indicate strong financial positioning and synergies. 5. CEO projects significant shareholder value creation from strategic moves.
FAQ
Why Bullish?
The acquisition improves AM's asset base and Free Cash Flow potential, similar to previous successful integrative acquisitions in the sector. Past acquisitions have led to significant market reactions due to improved operational efficiencies.
How important is it?
The strategic acquisition and divestiture align with Antero Midstream's goals to optimize its asset portfolio, which can significantly affect investor sentiment and stock price moving forward.
Why Long Term?
The benefits of the acquisition and divestiture are expected to materialize over time, particularly with cash flow and EBITDA growth, which typically reflects in the stock price over several quarters.
Antero Midstream Secures $1.1 Billion Acquisition of HG Midstream Assets
Ticker Symbol: NYSE: AM | Date: December 8, 2025
Antero Midstream Corporation (NYSE: AM) has announced a major strategic initiative, entering into a definitive agreement to acquire HG II Energy Midstream Holdings, LLC for a total of $1.1 billion in cash. This acquisition is expected to close in the second quarter of 2026, pending standard regulatory approvals. Alongside this acquisition, Antero Midstream has agreed to divest its Ohio Utica Shale assets for $400 million, slated for completion in the first quarter of 2026. Both transactions received unanimous approval from the Company's Board of Directors.
Details of the Acquisition and Divestiture
The acquisition of HG Midstream is poised to enhance Antero Midstream's presence within the core of the Marcellus Shale, which serves investment-grade customer Antero Resources. Key highlights of the acquisition include:
- Expected immediate accretion to Free Cash Flow after dividends by over 15% (non-GAAP).
- Anticipated addition of approximately 900 MMcf/d of throughput in 2026.
- Inclusion of over 400 undeveloped Marcellus locations dedicated to Antero Midstream.
- Acquisition multiple approximated at 7.5x next three years average annual EBITDA (non-GAAP).
- Identification of over $100 million in synergies, leading to an adjusted transaction multiple of 7.0x.
- Divestiture of Utica Shale assets at a transaction multiple exceeding 11x next three years average annual EBITDA (non-GAAP).
Executive Insights on the Strategic Moves
Michael Kennedy, CEO of Antero Midstream, emphasized the significance of these transactions in positioning the company as a premier midstream player within North America's lowest cost basin. He stated, "Today's strategic announcements further enhance the scale of Antero Midstream's asset base... creating significant shareholder value."
Justin Agnew, CFO of Antero Midstream, highlighted the company’s financial robustness, which enables them to pursue this acquisition without jeopardizing their credit profile. Agnew remarked, "These credit enhancing, strategic transactions position us well for further debt reduction and additional return of capital to shareholders."
Overview of the Acquired and Divested Assets
Marcellus Shale Acquisition Details
The acquisition involves all equity interests in HG Midstream, which includes:
- Approximately 50 miles of gathering pipelines for bi-directional transport.
- Another 50 miles of water pipelines, including above-ground storage and water withdrawal points.
The integration of these assets is expected to commence immediately upon closing. Financing for the acquisition will be sourced from Antero Midstream's revolving credit facility and proceeds from the divestiture.
Utica Shale Divestiture Summary
Under the separate agreement for the Utica Shale, Antero Midstream will divest gathering, compression, and water handling assets, bringing in $400 million. Expected average annual EBITDA from these assets is around $35 million over the next three years.
Advisory and Legal Counsel
Antero Midstream engaged RBC Capital Markets and Evercore as financial advisors for these transactions, with Vinson & Elkins L.L.P. providing legal counsel.
Conference Call Information
To discuss the transaction details, Antero Resources and Antero Midstream will hold a conference call at 7:00 a.m. MT on December 8, 2025. Interested parties can participate by dialing 877-407-9079 (U.S.) or 201-493-6746 (International), and referencing "Antero Midstream."
Understanding Non-GAAP Financial Measures
Antero Midstream utilizes several non-GAAP financial measures, including Adjusted Net Income and Adjusted EBITDA, to evaluate operational performance and potential acquisitions. These metrics provide valuable insights into the financial health of Antero Midstream's assets and overall company performance in comparison to peers in the midstream sector.